Income Taxes

On December 22, 2017, the federal government enacted the Tax Cuts and Jobs Act (the "Tax Act"). The Tax Act significantly revised the future ongoing federal corporate income tax by, among other things, decreasing the federal corporate income tax rate to 21.0% from 35.0% effective January 1, 2018. As the Company has a September 30 fiscal year-end, the lower corporate income tax rate was phased in, resulting in a blended federal income tax rate of approximately 24.5% for the Company's fiscal year ended September 30, 2018, and 21.0% for subsequent fiscal years. In addition, the reduction of the corporate federal income tax rate required the Company to revalue its deferred tax assets and liabilities based on the lower federal income tax rate of 21.0%.

As a result of the Tax Act, during the quarter ended December 31, 2017, the Company recorded a one-time income tax expense of $548,000 in conjunction with remeasuring its net deferred tax assets. The impact of using the 24.5% blended federal income tax rate for the year ended September 30, 2018 versus a 35.0% rate reduced the provision for income taxes by approximately $2.21 million, which was partially offset by the $548,000 one-time net deferred tax asset remeasurement.

The components of the provision for income taxes for the years ended September 30, 2018, 2017 and 2016 were as follows (dollars in thousands):



	2018		2017		2016
Current:
Federal	$	4,900	$	6,656	$	4,618
State	4		35		—
Deferred	797		385		283
Provision for income taxes	$	5,701	$	7,076	$	4,901

At September 30, 2018 the Company had income taxes payable of $151,000, which is included in other liabilities in the accompanying 2018 consolidated balance sheet. At September 30, 2017 the Company had income taxes receivable of $559,000, which is included in other assets in the accompanying 2017 consolidated balance sheet.

The components of the Company’s deferred tax assets and liabilities at September 30, 2018 and 2017 were as follows (dollars in thousands):



	2018		2017
Deferred Tax Assets
Allowance for loan losses	$	2,021	$	3,380
Allowance for OREO losses	311		443
Unearned ESOP shares	32		148
Core deposit intangible	31		103
OTTI credit impairment on investment securities	104		173
Accrued interest on loans	10		29
Net unrealized losses on investment securities	42		66
Deferred compensation and bonuses	56		94
Reserve for loan commitments	43		75
Other	29		39
Total deferred tax assets	2,679		4,550



Deferred Tax Liabilities
Goodwill	1,107		1,714
MSRs	426		639
Depreciation	283		480
Loan fees/costs	121		—
FHLB stock dividends	82		137
Prepaid expenses	74		140
Other	2		35
Total deferred tax liabilities	2,095		3,145

Net deferred tax assets	$	584	$	1,405

The provision for income taxes for the years ended September 30, 2018, 2017 and 2016 differs from that computed at the federal statutory corporate tax rate as follows (dollars in thousands):



	2018			2017			2016
Expected federal income tax provision at statutory rate	$	5,500		$	7,435		$	5,160
Net impact of the Tax Act	548			—			—
BOLI income	(134		)	(191		)	(189		)
Dividends on ESOP	(71		)	(102		)	(83		)
Stock options tax effect	(157		)	(188		)	—
Other, net	15			122			13
Provision for income taxes	$	5,701		$	7,076		$	4,901

No valuation allowance for net deferred tax assets was recorded as of September 30, 2018 and 2017, as management believes that it is more likely than not that all of the net deferred tax assets will be realized based on management's expectations of future taxable income and/or because they were supported by recoverable taxes paid in prior years.